Cost of home dream in Auckland - 19 incomes

Auckland's $582,000 median house price is below many of world's big cities but low wages make it a bigger ask.

Auckland incomes were low because the percentage of unskilled workers was high compared with other big cities. Photo / Brett Phibbs

It would take 19 median incomes in Auckland to buy a home for the city's median house price.

Property in some of the world's biggest cities cost a lot more than in our biggest city, but Auckland wages make it much harder to get on the property ladder.

In the 1,119,195 Census forms filled out for Auckland, the median annual income was $29,600, a Herald analysis found.

That's almost 20 times less than the Real Estate Institute's median house price figure of $582,000.

In London it takes 11 annual average incomes to reach the average house price of $777,000, and 13 in Vancouver and Sydney - with average house prices of $687,000 and $791,970.

"You are certainly not going to become a first-home buyer on the average income," said Associate Professor David Tripe at Massey University's Centre for Banking Studies.

Professor Tripe said Auckland incomes were low because the percentage of unskilled workers was high compared with other big cities.

"We've got quite a lot of people who are not working ... and they drag the average incomes down.

"We're relatively low paid because in most cases, we're relatively unproductive ... one of the big challenges is to get the skill level of the workforce up, get productivity up and then we can be quite a lot richer."

The Government has introduced several measure in a bid to slow house-price increases, including the Reserve Bank's loan-to-value rules which restrict to 10 per cent the total of a bank's lending to borrowers with less than a 20 per cent deposit.

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But banks would favour customers who had saved over a long period and he encouraged house hunters not to become disheartened and keep adding to their savings accounts.

Buyers could also look at non-bank lending but should shop around and be sure they can handle the repayments.

Professor Tripe said he expects that in about six months, the Reserve Bank will see the mortgage restrictions haven't had a great effect on prices, as property commentators "don't think it's going to solve the problems of rapid house price rises in Auckland".

Valuer Bruce Wiggins of Quotable Value said the LVR changes had not yet had any distinct effect on prices in Auckland, and open home numbers were decreasing with more sales being made by negotiation rather than auction.

"Investors are also in the market, however they are only progressing on properties where they will see good returns."

QV figures yesterday showed the average house price in Auckland had reached $685,350 - an increase of 15.2 per cent on a year ago and 25.4 per on the 2007 peak.